2013 Supreme(Raj) 1347
RAJASTHAN HIGH COURT AT JAIPUR BENCH
Ms.Bela M.Trivedi, J.
Chokhi Dhani Resorts Private Ltd. - Appellant
Versus
M/s. Essem Recreation - Respondent
S.B. Civil Misc. stay application No. 750 of 2013 in S.B. Civil Misc. Appeal No. 1107 of 2013.
Decided On : 23-05-2013
For the Appellant-Applicant:Mr. S. Kasliwal, Senior Counsel with Ms. Sukriti Kasliwal, Advocate.
For the Respondent:Mr. Rajendra Prasad, Mr. Rajesh Maharshi, Mr. Sandeep Taneja, Advocates.
An agreement to submit to the jurisdiction of a particular court is valid, and the parties cannot confer jurisdiction on a court that would not otherwise have it under the CPC.
Headnote:
ARBITRATION - JURISDICTION - AGREEMENT - INTERIM INJUNCTION - TRADE NAME - FRANCHISE AGREEMENT - TERMINATION - RESTRAINT OF TRADE - SPECIFIC RELIEF ACT, SECTION 41(E) AND 42 - CONTRACT ACT, SECTION 27 - ARBITRATION AND CONCILIATION ACT, 1996, SECTION 9 - CPC, SECTION 20, ORDER XXXIX RULE 1 AND 2.
Fact of the Case:
Appellant and respondent entered into a franchise agreement for the use of the trade name 'Chokhi Dhani' in Ahmadabad for 21 years with a lock-in period of 10 years. Disputes arose, and the respondent terminated the agreement and filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (the Act) in the court at Ahmadabad. The appellant filed a similar application in the court at Jaipur. The court below dismissed the appellant's application, holding that it lacked jurisdiction and that the appellant had not disclosed the pendency of the application in Ahmadabad. The appellant challenged this order in the High Court.
Finding of the Court:
The High Court held that the court below had jurisdiction to entertain the appellant's application. The agreement between the parties contained a clause stating that only the courts in Jaipur would have jurisdiction over disputes arising from the agreement. The court also found that the appellant had not intentionally concealed the pendency of the application in Ahmadabad, and that no prejudice had been caused to the respondent as a result. On the merits, the court held that the respondent was not entitled to use the trade name 'Chokhi Dhani' after the termination of the agreement. The agreement contained a clause stating that the trade name would revert to the appellant upon termination. The court also held that the respondent could not be restrained from carrying on a similar business, as such a restraint would be void under Section 27 of the Contract Act.
Issues: 1. Whether the court below had jurisdiction to entertain the appellant's application under Section 9 of the Act? 2. Whether the appellant was entitled to an interim injunction restraining the respondent from using the trade name 'Chokhi Dhani'? 3. Whether the respondent could be restrained from carrying on a similar business after the termination of the agreement?
Ratio Decidendi: 1. The court below had jurisdiction to entertain the appellant's application because the agreement between the parties contained a clause stating that only the courts in Jaipur would have jurisdiction over disputes arising from the agreement. Additionally, the appellant had not intentionally concealed the pendency of the application in Ahmadabad, and no prejudice had been caused to the respondent as a result. 2. The appellant was entitled to an interim injunction restraining the respondent from using the trade name 'Chokhi Dhani' because the agreement contained a clause stating that the trade name would revert to the appellant upon termination. 3. The respondent could not be restrained from carrying on a similar business after the termination of the agreement because such a restraint would be void under Section 27 of the Contract Act.
Final Decision: The High Court allowed the appellant's application in part, restraining the respondent from using the trade name 'Chokhi Dhani' for conducting its business or trade at the location in Ahmadabad mentioned in the franchise agreement, pending the appeal.
JUDGMENT
1. - Heard the learned counsels for the parties at length, on the application seeking interim injunction pending the civil misc. appeal.
2. The appellant-applicant has filed the Civil Misc. Appeal being No.1107/2013 under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the said Act"), challenging the order dated 07.03.2013 passed by the Additional District Judge No.15, Jaipur Metropolitan, Jaipur (hereinafter referred to as "the court below") in Misc. Application No.66/2013, whereby the court below has dismissed the application of the appellant filed under Section 9 of the said Act seeking the interim measures. The respondent has also filed the S.B. Civil Writ Petition being No.6958/2013 under Article 226 & 227 of the Constitution of India challenging the order dated 15.02.2013 passed by the court below in the said application being No.66/2013, rejecting the objection raised by the respondent as regards the jurisdiction of the court below, to hear the application filed by the appellant-applicant under Section 9 of the said Act. The Court has admitted both, the C.M.A. and the writ petition after hearing the learned counsels for the parties at length. In the present application, the appellant-applicant has prayed to grant the interim relief for restraining the respondent from using the Trade name/Trade Mark "Chokhi Dhani" in any form and manner including the use as a signage/advertisement/letter heads etc. and from conducting any business or trade in the said name, as well as from carrying on the identical/similar services rendered by the appellant directly or indirectly from the premises of the respondent and from carrying on any village fair services identical or similar to the services rendered by the appellant, till the disposal of the appeal.
3. The appellant-applicant had filed the application under Section 9 of the said Act before the court below, seeking various interim measures as contained in the said application, alleging interalia that the appellant was a company duly registered under the Companies Act, 1956, having its registered office at Jaipur and that the respondent was a partnership firm having its office at Ahmadabad. It was further averred in the application that the appellant was the proprietor of the trade name "Chokhi Dhani" and was engaged amongst other activities, in the services of hospitality, entertainment, food and beverage services, amusement park, ethnic village, and such other services, for last more than 22 years and had successfully developed its image and market perception as an ethnic village of rural ambiance, art & culture. It was also averred that the appellant had started franchise format of business and had franchise outlets at Surat, Mumbai, Pune, Panchkula and Chennai besides Ahmadabad and self run outlets at Jaipur, Indore, Jaisalmer and Bangaluru.
4. It was further case of the appellant-applicant that the appellant (franchiser) had entered into one franchisee agreement with the respondent firm (franchisee) on 20.06.2008 for a period of 21 years with the lock-in period of 10 years, for operating and maintaining the franchise outlet within the territory of the city of Ahmadabad. As per the said agreement, the appellant had by way of permissive use, granted the respondent the right to use the said trade name "Chokhi Dhani" in relation to the services in accordance with the terms and conditions mentioned in the agreement.
5. It appears that thereafter certain disputes had arisen between the appellant and the respondent with regard to the operation of business under the agreement in question, and ultimately the respondent vide legal notice dated 04.12.2012 sent through its counsel, terminated the said franchisee agreement dated 20.06.2008, claiming damages to the tune of Rs.9.44 crores. The appellant also give the reply to the said notice through its counsel on 04.12.2012, calling upon the respondent to provide the daily sales reports for the peri
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